Law Firm

How To Spot Investment Fraud And Take Legal Action

Investment fraud is carried out in various ways but the most common route scammers use is posing as reliable investment service providers, promising low risk high returns. They convince their targeted customers to transfer large sums of money and give the impression that their money is largely increasing due to their investment. After a short while they suddenly close the client’s account and cease all contact, taking the client’s large sum investment with them.

They create convincing-looking websites and promotional platforms that make them seem like a regulated broker. They even include celebrity endorsement or pose as celebrities to gain people’s trust and encourage them to get involved in these investments that are too good to be true.

How to spot them

There are tell-tale signs that can make it clear you are trying to be lured into an investment scam and some techniques can be quite under the radar. Techniques such as cold calling should be flagged as fraud, no authorised financial advisor would ring you or pressure you into any financial decision. The pressure technique can be seen in instances when they allude to the idea that it is a limited-time investment, and if you turn down the offer you won’t see other investments like it with such big rewards. If they know you are new to investing they will try to confuse clients with legal jargon that they know clients won’t understand. Additionally, they will almost try to groom their clients into believing they are being offered an investment that no one else has access to, and if they are trying to convince their clients of this then they should be very cautious.

Taking action if you have been scammed

If clients are under the impression that they have been scammed, and if they haven’t done so already they should contact the FCA authority and check they are registered and regulated. Whether they are or not, it is important to contact the financial ombudsman and alert them of what has happened. They will work to make the client and provider come to an agreement and highlight any fraudulent activity if it has taken place. If you have been subjected to broker scams, the financial ombudsman should be the first point of contact.

You may even consider warning people on the platform that they initially targeted you on. For example, if scammers reach out to you on Facebook, you should post for people’s awareness that they might be liable to be scammed if they are looking into investment opportunities. Often victims will find others that have been swindled by the same investment scam, and sometimes have more legal strength if your group builds a case against the scammers.

Reporting the scam to other organisations such as investment fraud lawyers can also increase the chances of the fraudsters being caught and stopped. They can work towards not only stopping the perpetrators but also getting the victims of fraud their money back, and in some cases victims have lost hundreds and thousands of dollars.

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